Who is Benefiting from the CRTC’s Pick & Pay Ruling?
On December 1st, the next step of the CRTC’s Let’s Talk TV policy decision (2015-96) will be implemented. The CRTC wants to give Canadians more choice in selecting the channels they pay for. Let’s take a look to see if the CRTC has achieved this goal and the role the Let’s Talk TV policy has played in Beanfield’s TV product.
What does this mean for broadcast distributors?
As of February 1st, 2016, all licensed Broadcasting Distribution Undertakings (BDUs) have been offering a “Skinny Basic” TV package consisting of the local over-the-air channels, mandatory channels (such as The Weather Network and APTN) and possibly some American networks as well. On December 1st, 2016, licensed BDUs will now have to offer all discretionary channels in small bundles (less than 10 channels) or as a stand-alone service. Consumers will have more choice than they have ever had when choosing the channels they want to subscribe to. Will consumers still have to pay for channels they never watch?
The Let’s Talk TV policy has allowed us at Beanfield to do what we always wanted to do – offer the smallest basic package possible with the option for additional individual channels. We always knew customers hated paying for channels they never watched and we wanted to keep things simple and let them choose. However, at the time that decision was really made by the content owners and the restrictive packaging requirements of their agreements so we were prevented from doing this. As of December 1st, we will now be able to offer this, but at a cost decided by the content owners.
What does this mean for consumers?
With the implementation of this new policy, will our customers be better off now than they were a year ago? This will depend on what type of TV watcher you are.
For our customers who are primarily interested in the local news and network TV, cutting down their monthly TV bill will definitely be possible with the Skinny Basic TV Package. This gives you your basic news channels, with the option of adding individual channels for as little as $2/month and many of your favourite channels will be $3/month. So, say for instance you wanted to add on The Food Network and HGTV, your monthly TV bill will be $26 compared to $44 – a total savings of more than $200 per year! Sure, you will have access to fewer channels than you did before, but if you weren’t even watching them you won’t miss them.
The specialty channel enthusiast
For customers who are interested in specialty channels such as Sportsnet or the E! Network, your monthly bill will likely increase depending on your interests. You may be able to keep your monthly bill the same but it’s likely you will end up having access to fewer channels.
This is because there has been a drastic cost increase to content as the packaging restrictions have been removed by the CRTC decisions. This means that when packages are unbundled, fewer people are subscribed to the channel, which results in less ad revenue for the network. This shortfall in ad revenue means the content owners have to increase the cost to make up the loss.
What does this mean for content owners?
We’ve already started to see the fallout of the decision on the content owners. Some channels have already gone off the air (i.e. Pet TV and iChannel), many channels have changed ownership (i.e. MuchLoud and MuchVibe) and some have been rebranded (i.e. M3 to Gusto and Biography to Vice). This is going to be the new norm as each channel is going to have to find its own audience and can’t depend on being forced upon the consumer with the previous restrictive packaging requirements.
The next year is certainly going to be interesting as everyone adapts to the new landscape.